Multiparty agreement is the key, says a specialist from across the Tasman.
WELLINGTON - New Zealand should at least look at the Australian experience when developing a national superannuation framework, an Australian superannuation specialist says.
Both countries faced common issues, and there had been key successes in Australia which New Zealand
should draw on, as well as some pitfalls to avoid, AMP Australia superannuation strategy manager Kevin Casey said.
Although some areas needed to be ironed out, Australia had adopted a three-tier system which had been highly successful overall, he said.
Mr Casey was in Wellington last week to speak about how Australia was preparing to look after its ageing population.
"The key is in shared responsibility," he said.
"In Australia, responsibility for an individual's retirement income is shared by employers and individuals, as well as the Government.
"The system is geared to encourage people to supplement the assistance they receive from the Government, confining direct Government support for the pension to around 3 per cent of GDP.
"This compares to projections of 5 to 11 per cent in New Zealand over the next few decades."
The Australian system offered a good amount of choice in terms of contribution levels, how the investment was managed and income streams in retirement, he said.
"The system has been well accepted by Australians, and a key contributing factor has been the agreement between political parties on key elements, ensuring stability of the core system.
"However, Australia must now work on enhancing the system in areas which are not working well. In particular, compliance costs are far too high."
AMP Financial Services New Zealand general manager John Drabble said there was no perfect solution or quick fix.
"What is clear, however, is that like the Australians, we must achieve multiparty support to ensure our superannuation solution builds momentum over time.
"In order to plan for their retirement well in advance, New Zealanders need stability and certainty and a clear long-term picture.
"We should draw on the lessons Australia has learned in recent years, and decide for ourselves what is right for New Zealand," he said.
"The New Zealand solution will undoubtedly involve compromise, and we need to address the question of balance between incentives and compulsion."
- NZPA
